The California Hospital Association (CHA) is disappointed that the Brown Administration has not reversed deep and damaging Medi-Cal rate cuts in its May revision of the state's proposed 2013-14 budget. These cuts are ill-timed and will devastate vital health care services to some of the state's most vulnerable residents.

Hospitals that operate skilled-nursing facilities in both rural and urban parts of the state will face the loss of hundreds of millions of dollars, jeopardizing access to care for thousands of elderly, frail patients, more than 70 percent of whom are covered by Medi-Cal. The pending cuts are so deep that some facilities – particularly in rural communities - may have to close their doors. If this happens, there will be no place for these patients to receive the care they need.

CHA is pleased to see that the Administration supports the need for adequate rates to be paid for services provided to newly eligible Medi-Cal beneficiaries, but we believe adequate rates should be paid for all services provided to all Medi-Cal enrollees. California's Medi-Cal rates are already the lowest in the nation.

The Administration's own budget document says the state has "an interest in maintaining a strong public safety net to ensure access to health care services…for Medi-Cal beneficiaries and the uninsured." CHA agrees. It is inconsistent for the Administration to express support for ensuring access to care and then propose cuts that undermine that same access in a significant way. Creating a two-tier payment system will only rip a deep, irreparable hole in the state's health care safety net.

Similarly, the Administration says its budget "…encourages job growth…" CHA's analysis of the Medi-Cal cuts, however, shows that these payment cuts will jeopardize thousands of jobs and will result in a significant drag on California's still-recovering economy.

California's budget picture continues to improve. The Brown Administration should not pass on the chance to restore specific cuts that would serve to protect the most vulnerable among us and preserve a basic quality-of-life issue: access to quality health care.